Customer Identification Program: Difference between revisions

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{{Primary sources|date=December 2007}}

A '''Customer Identification Program''' ('''CIP''') is a [[United States]] requirement, where [[financial institution]]s need to verify the identity of individuals wishing to conduct [[Financial transaction|financial transactions]] with them and is a provision of the [[USA Patriot Act]]. More generallycommonly known as [[know your customer]], the CIP requirement was implemented by regulations in 2003 which require US financial institutions to develop a CIP appropriateproportionate to the size and type of its business. The CIP must be incorporated into the bank's [[Bank Secrecy Act]]/[[Anti-money laundering]] compliance program, which is subject to approval by the financial institution's board of directors.

== History ==

In 2002, the [[United States Department of the Treasury|Department of the Treasury]], through the [[Financial Crimes Enforcement Network]] (FinCEN), together with the Office of the [[Comptroller of the Currency]] (OCC), the Board of Governors of the Federal Reserve System (Board), the [[Federal Deposit Insurance Corporation]] (FDIC), the [[Office of Thrift Supervision]] (OTS), and the [[National Credit Union Administration]] (NCUA) (collectively, the Agencies), jointly adopted a final rule to implement section 326 of the Uniting and Strengthening America by Providing Appropriate Tools Required To Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001 (the Actact).

The rule had an effective Date of June 9, 2003 and each US [[financial institution]] had to comply with this final rule by October 1, 2003.<ref>{{cite web |url=http://www.fdic.gov/news/news/financial/2004/FIL0404.html |archive-url=https://web.archive.org/web/20070603121806/http://www.fdic.gov/news/news/financial/2004/FIL0404.html |url-status=dead |archive-date=June 3, 2007 |title=New Anti-Money Laundering Guidance |date=January 9, 2004 |publisher=[[FDIC]]}}</ref>

In July 2016, FinCEN enacted new rules regarding beneficial ownership:<ref>{{cite web |url=https://www.ffiec.gov/bsa_aml.../FAQs_for_CDD_Final_Rule_(7_15_16).pdf |title=Frequently Asked Questions Regarding Customer Due Diligence Requirements for Financial Institutions |publisher=FinCEN |date=July 19, 2016 }}{{Dead link|date=July 2020 |bot=InternetArchiveBot |fix-attempted=yes }}</ref> Financial institutions must collect from the legal entity customer the name, date of birth, address, and social security number or other government identification number (passport number or other similar information in the case of foreign persons) for individuals who own 25% or more of the equity interest of the legal entity (if any), and an individual with significant responsibility to control/manage the legal entity at the time a new account is opened.

== Requirements ==

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== External links ==

*[http://www.gpo.gov/fdsys/pkg/CFR-2010-title31-vol1/pdf/CFR-2010-title31-vol1-sec103-121.pdf CFR 2010 31 CFR 103.121 Federal regulations requiring the CIP]

*[https://www.fincen.gov/resources/statutes-regulations/guidance/frequently-asked-questions-regarding-customer-due-0 FAQ Regarding Customer Due Diligence Requirements for Financial Institutions]

*[http://www.ffiec.gov/bsa_aml_infobase/pages_manual/OLM_005.htm Guidance information for banks provided by the FFIEC]

*[https://www.trulioo.com/blog/ensurekyc/customer-cipidentification-runs-smooth/program Trulio blog -– StepsManage toCustomer runIdentification aProgram customer identification programRequirements]

[[Category:Financial regulation]]